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Buyouts Likely to Weaken UAW Further

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Buyouts Likely to Weaken UAW Further

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Buyouts Likely to Weaken UAW Further

Buyouts Likely to Weaken UAW Further

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The UAW faces further weakening with the announcement by Ford that it will offer buyouts to all North American hourly workers in an effort to slash its payroll. The move will eventually drain thousands of workers from the UAW's active rolls.

RENEE MONTAGNE, host:

Joining us now to talk about Ford's announcement and what it means for the company's workers is NPR's Frank Langfitt. Good morning.

FRANK LANGFITT: Good morning, Renee.

MONTAGNE: So let's get to what Ford is actually offering the individual workers.

LANGFITT: Well, it's similar to what GM offered its workers earlier this year. If you're a Ford worker, you can make anywhere from 35,000 in a lump sum or 140,000, depending on how many years of service you have at the company.

One aspect that might be attractive to younger workers is if they have only a year in, they can get $100,000 in a lump sum and six months of health care, which could serve as a bridge to a new job. The other thing is, if they want to go to college or vocational school, the company will pay them half their pay if they go for four years.

MONTAGNE: So what kind of calculations does a worker have to make to decide whether to take this buyout?

LANGFITT: Well, these decisions are really personal. I spent a lot of time with GM workers earlier this year, and it - I think we're going to be in for a lot of complicated dinner table conversations at the homes of Ford workers in the coming days and weeks.

The first issue's probably going to be healthcare. If somebody takes a deal that doesn't include continued healthcare, they have to look and see: does their spouse have a job that provides healthcare? Because it's so expensive in this country.

So that's one of the things people are going to focus on first. Another question is your age. You know, if you're close to retirement, maybe it's a good time to get out. Are you going to get offered the next deal to get people to leave? Maybe it'll be worse. But what if you have kids in college? That's another question. Do you want to stay on and try to save enough to get them through college?

If you're younger, one of the things you have to really think about is the future. There's a contract coming out in 2007, coming up for negotiations. Are you going to see cuts in wages? Are you going to have more give-backs coming from the union?

So those are the kinds of things that I think people have to think about.

MONTAGNE: And what are the estimates out there about how many of these workers are likely to take a buyout?

LANGFITT: It's always hard to say with these things. I think the writing's on the wall though. I think most auto workers in the country now realize that this industry, particularly GM and Ford, it's going to be a lot smaller if it's going to survive. So there are going to be far fewer jobs out there for people. And I think that's going to really influence their thinking.

The other thing is that when GM made its offer earlier this year, they were shooting for 30,000. They ended up getting 34,000, about a third of their workforce. And many of those were close to retirement. But I think people saw it as a time to get out of the auto business before things got worse.

MONTAGNE: Well, this kind of announcement, Frank, brings up the question of is this the beginning of the end of high-paying jobs in the American auto industry?

LANGFITT: Well, yes and no. You know, these are great paying jobs. They pay - often starting you can get about $28 an hour, with no more than an education in high school, and the benefits are terrific. If you're skilled, you can make $34 an hour.

But again, there are going to be a lot fewer of these. And I think that if you want to keep working in the auto industry, you're going to have to move and you're probably going to have to take a bit of a pay cut.

You know, down in the South we have plants at Toyota - there's Toyota and Hyundai plants that are continuing to produce jobs and open and doing very well, are selling a lot of cars in this country. But they don't pay quite as much and the benefits don't tend to be quite as good.

MONTAGNE: Well, when - another part of this is the United Autoworkers itself. What does this mean for the union?

LANGFITT: Well, this is another blow to one of those most powerful unions in the country. If you look back in the '70s and the '80s - especially when, you know, Detroit was so successful - the UAW was able to negotiate just terrific labor contracts. They got gold-plated health benefits for their workers. They even got this thing called a jobs bank, which offers people, if they're laid off from their work, if they don't have work at the factory, they can go and do something else and still get paid practically a full salary.

When the contracts come up again in 2007, the United Autoworkers are going to be under a lot of pressure to give up more. And the other thing is that they're losing tens of thousands of members with these buyouts, and a union's strength is based so much on its numbers. And so I think you're going to see a continued erosion of the union's power.

MONTAGNE: NPR's Frank Langfitt, thanks so much.

LANGFITT: Thank you, Renee.

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